Saturday, October 27, 2007

Nova Corp, Japan's largest English conversation school filed for court protection yesterday at Osaka's District Court. The Osaka-based company has estimated debts of around 50 billion yen (US$437m) and teachers and staff have not been paid since September.

Nova, which is the largest employer of foreign nationals in Japan with around 4,000 teachers working in 900 schools nationwide, ran in to problems in June, when the company was ordered to suspend part of its operations, after a court ruling found it had duped students over fees.

Nova's dictatorial president Nozomu Sahashi was removed from his position as CEO and Anders Lundqvist and Shoichi Watanabe have taken over as representative directors.

Nova is now struggling to find a sponsor to rehabilitate its finances and is wooing such companies as fellow conversation school Aeon and IT giants Yahoo Japan and Rakuten. If the company survives it is expected to close a number of its schools.

After the bankruptcy procedure, if it is deemed that the company cannot pay back wages, employees with salary owing will be eligible to receive 80% of their back pay.

Nova was started by high-school grads Nozomu Sahashi and Anders Lundqvist in 1981 in Osaka and opened its first school in Shinsaibashi offering cut-price English lessons.

The chain grew rapidly through aggressive TV advertising campaigns emphasizing its convenient locations near to major railway stations (駅前留学 ekimae ryugaku - study overseas near the station) and the popularity of its pink rabbit mascot (Nova usagi).

Recently the school has been plagued by controversy with rising complaints and law suits from disgruntled students and staff. The school also gained notoriety when it wanted to introduce a policy of mandatory drug-tests for its non-Japanese employees and imposed an "anti-fraternization policy" on its foreign staff, which was contested in the courts.